If Monetary Policymakers Fear a Recession Resulting from Increased Pessimism

question 10

Multiple Choice

If monetary policymakers fear a recession resulting from increased pessimism on the part of business people, and they want to avoid the recession, they would:

• A)Shift the monetary policy reaction curve to the right
• B)Shift the monetary policy reaction curve to the left
• C)Likely lower their target rate for inflation
• D)Encourage fiscal policymakers to act

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